Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • July 2018
07

PLSA rejects climate change law for investment decisions

Open-access content Friday 20th July 2018 — updated 5.50pm, Wednesday 29th April 2020

The UK’s pension fund trade body has argued that new regulations governing how trustees invest £1.5trn in assets should exclude explicit reference to climate change.

2


The Pensions and Lifetime Savings Association (PLSA) said including climate change specifically in a new law could "confuse" trustees by unintentionally narrowing their focus.

This could cause them to disregard other environmental, social and governance (ESG) considerations that may be more relevant to their portfolios, such as resource depletion or human rights.

This is despite the PLSA reiterating its belief that climate change poses a substantial risk to the business models of firms in almost every sector, threatening the stability of the financial system.

"It is important that pension schemes consider risks related to climate change as part of their investment strategies, however, this is clearly not the only ESG factor to consider," the PLSA said.

"We believe that picking out any one factor as a specific example may lead trustees to assume that is the only, or most important, factor to consider, when others might be more relevant."

This comes in response to a consultation by the Department for Work and Pensions into new sustainability regulations for workplace pension funds, which closed on 16 July.

The PLSA also rejected proposals that would see trustees prepare a statement outlining how they take account of scheme members' views, saying they were "neither practical nor purposeful". 

It argued that members should not be expected to be investment experts, and that trustees should invest in the best interest of members even if it "runs counter to strongly-held beliefs".

Lawyers at ClientEarth, which co-produced a climate risk report with the PLSA in 2017, said rowing back on the "crucial" government proposals would be "hugely irresponsible".

"Major financial institutions and world experts recognise climate risk as the most significant financial risk to the economy," said ClientEarth finance lawyer, Alice Garton. 

"Human rights abuses and resource depletion are crucial ESG issues, but what the PLSA seems to have overlooked, is that a changing climate underpins and intensifies these risks."


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession


This article appeared in our July 2018 issue of The Actuary.
Click here to view this issue
Filed in
07

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Life Actuarial Trainee

England
Up to £55000.00 per annum
Reference
145815

Catastrophe Manager - Top Performing Syndicate

England, London
£70000 - £94000 per annum
Reference
145814

Senior Pricing Analyst

London, England
£40000 - £80000 per annum
Reference
145813
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ